Highlights

Citizen Pilates is a destination studio in Houston’s historic Heights neighborhood. The studio is revered for its upbeat, fitness-based group reformer classes, and its positive and inclusive environment has given members a fresh take on an otherwise stuffy studio archetype.

Demand for classes has exceeded capacity at the first location, and Citizen is opening its second location in December.

Reformer Pilates studio in Houston’s historic Heights neighborhood

Accomplished entrepreneur expanding to meet overflow in demand from successful first studio

This investment is secured by a blanket lien on all assets of the company

Investment Terms

IssuerFlying Nun Collective LLC

Type of OfferingRegulation Crowdfunding

Offered ByNextSeed US LLC

Offering Min

$65,000

Offering Max

$100,000

Min Individual Investment

$100

Type of Securities

Term Note

Maturity

48 months

Payments

Monthly

Security Interest

The Issuer will grant a security interest in all of its assets in favor of NextSeed for the benefit of the investors to secure the Issuer’s obligations under the Securities.

Ownership % Represented by Securities

0% Investors will not receive any equity interests in the Issuer or any voting or management rights with respect to the Issuer as a result of an investment in Securities.

Use of Proceeds

100% of the proceeds will be used for the purchase of custom Pilates reformers. Any excess funds will be put towards the build out of the interior space and working capital for staffing and operations.

Company Description

Citizen Pilates is a destination studio in Houston’s historic Heights neighborhood. The studio is revered for its upbeat, fitness-based group reformer classes, and its positive and inclusive environment has given members a fresh take on an otherwise stuffy studio archetype.

Demand for classes has exceeded capacity at the first location, and Citizen is opening its second location in December.

Citizen first opened its doors in August 2015. Its founder and original Citizen, Jessica Hughes, had a vision for a fitness studio that stood out from what the market already offered. Citizen’s atypical approach to high level client service and intimacy, coupled with affordable boutique pricing, welcomed members of all ages to experience Citizens’ strong culture.

Over 11 million people practice Pilates as a form of exercise. Pilates is characterized by slow and controlled movements that make your muscles toned, long and lean. Reformer Pilates involves balancing and doing exercises on a customized machine, using various pulleys to slowly tone muscles. The setup can be intimidating for newcomers, but Jess’s vision for the studio included personalized attention and small class sizes to help foster a more intimate class setting.

What makes a fitness studio is the classes it offers. But what makes a community are the relationships that are built and the culture that is created. Citizen has carefully crafted a community, both online and offline, to develop a winning formula for both its members and the business.

Demand for classes at Citizen has outgrown the space. By March 2016, the studio began implementing an automated online wait-list to accommodate the excess demand. The original studio is currently offering 50-60 classes per week, with most days starting as early as 5:30am and ending as late as an 8:30pm session. Even with classes throughout the day, reservations have filled up quickly. The sole complaint from members became, “We can never get into class.”

In August of 2016, Jessica Hughes secured Citizen’s second location, just 2 miles west of their flagship studio. The proximity of the two locations will serve as a carefully crafted ecosystem, allowing the studio to effectively double its capacity while still maintaining the intimate experience and close community that it’s created.

Construction on the second location is already underway and is scheduled for a December opening – just in time for the new year!

Business Model

Citizen Pilates is a service based boutique Reformer Pilates studio offering 60 group classes 7 days per week. Clients book and pay through its online site or branded app up to 60 days in advance. There are 3 options to purchase classes. 1) single drop in 2) class packages ranging from 5 – 20 classes 3) monthly autopay membership contract. All class reservations are prepaid via credit card and processed by customized MINDBODY online scheduling and point of sale software.

Citizen Pilates’ core values are centered around its members and the ability to service clients turned off by high-end boutique exclusivity. Its CRM systems allow managers and instructors to establish and retain genuine relationships with their clients beyond class time in an effort to consistently grow membership.

The fitness industry continues to grow at a rapid pace. An estimated $25.8 Billion was generated by gym memberships in the United States in 2015, and nearly 42% of memberships are with boutique fitness studios.

Specifically, Pilates and yoga studios are dominated by smaller, boutique single locations or smaller local chains. With less than 5% of the industries total revenue coming from the top 4 companies, this is an industry that thrives at the local level. From 2010-2015, the Pilates and yoga industry saw 7.5% annual growth and $9 billion in revenue.

Early on, Citizen focused heavily on extending its culture online with a digital presence that reflected the ethos of the studio. Branding agency PinkCilantro President Basya Benshushan says, “In today’s digital age far too many companies miss a tremendous opportunity to fuel offline brand experience and loyalty across a digital landscape. Citizen is not one of those companies. Jessica Hughes is the driving force behind Citizen’s strong brand culture. Her leadership and vision come from a highly analytical point of view.”

Through targeted campaigns and genuine online interactions, Citizen’s instructors and clients engage with the studio more often and more deeply across social mediums. Their loyalty lives beyond a scheduled class. Attendance analysis supports Citizen’s ability to attract and retain clients outside a 40-mile radius from its flagship location.

Citizen’s second location is strategically opening within a 10-minute drive of its current location. Membership demand remains high in the area, and the close proximity allows members and instructors to easily travel between the two based on availability and demand.

The new studio is scheduled to open by year-end.

Location Analysis

Citizen Pilates operates the following two locations:

Citizen #1: 3217 Houston Ave, Houston, TX 77009 – in operations

Citizen #2: 940 Heights Blvd, Houston, TX 77008 – under construction

Both locations are in the Heights district of Houston, a community located just 4 miles from downtown. The Heights is one of the earliest planned communities in Texas, dating back to the 1800s and is well known for its historic homes.

The Heights population is diverse in all categories, as young couples, millennials and professionals, have been flocking to the Heights over the past decade for its prime real estate, growing restaurant and bar scene, and eclectic shops.

Due to its prime location and strong sense of community, the Heights real estate market has been one of the best performing neighborhoods in Houston over the past one, five and ten-year periods. The neighborhood’s charm and small-town feel was also recognized by CNN Money, coming in at #4 on its 2013 ranking of the Top 10 Big City Neighborhoods.

Yellow flags indicate Pilates and yoga studios in the vicinity

Because the first location has maintained close to maximum utilization, Citizen strategically sought expansion opportunities within close proximity to its first location. This will allow the business to service existing customers and draw new customers in a centralized, prime location in Houston. The yellow flags in the map above represent yoga and Pilates studios. Among the greater Heights and surrounding downtown areas, very few locations offer Pilates, and fewer than a handful offer Reformer Pilates.

In a one-mile radius of both locations, household income average is approximately 205% and 165% as compared to the national average, respectively. For the first and second locations, the population density is 2.5 and 3.6 times the national average, respectively. Average annual expenditures are slightly above national spending for both locations. (Piinpoint Data) The Heights is bounded by Interstate I-10 on the south, North Shepherd Drive on the west, Interstate 610 on the north and Highway 45 on the east, making this area extremely accessible from all directions. For residents of the Heights, it offers a short work commute to downtown Houston, Houston’s Inner Loop, Medical Center and the Galleria. In addition to accessibility, many Houstonians visit the Heights area for its parks and trails. The Hike & Bike Trail connects the north side of Houston’s Inner Loop with over hundred miles of city trails.

Meet the Team

Jessica Hughes

Founder

Jessica Hughes is a native Houstonian and the owner and founder of Citizen Pilates. Her career as an analyst for two Houston-based oil companies helped shaped her keen sense of detail to economic sensitivities, project management and executive administration.

Despite her admiration for corporate culture, Jessica is a successful entrepreneur with recognized strengths in small business start-ups and proactive marketing initiatives. In 2010, she co-founded an independent bicycle fitting studio – a model never successfully proven by predecessors within Texas’ cycling industry. Today Tad Hughes Custom Fit Studio remains Texas’ only independent, service-based bicycle diagnostic center. Its brick and mortar location in the Heights services cyclists, runners and triathletes throughout the southern United States.

Jessica has also served on the boards of Northwest Cycling Club, where she is a lifetime member, and the Texas Bicycle Racing Association.

Bonus Rewards

Invest

$500+

1-Week Unlimited Class Pass

Invest

$1,000+

2-Week Unlimited Class Pass

Invest

$2,500+

One-Month Unlimited Membership

Invest

$5,000+

One-Month Unlimited Membership

Private Pilates and Prosecco Party for you and 6 Friends

Invest

$10,000+

One-Month Unlimited Membership

Private Pilates and Prosecco Party for you and 6 Friends

5 Private Appointments (one-on-one, 50 minute sessions)

Gallery

Total Payment Calculator

Interest Rate*

15.25%

Term

48 months

Principal

$100.00

Total Payment*

$134.20

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Projected total payment

* Payment for any given month (including the total payment at the end of the final month) indicates the cumulative amount contractually required to be paid to an investor after the end of that month, assuming the loan is not prepaid. This calculation is a mathematical illustration only and may not reflect actual performance. It does not take into account NextSeed fees of 1% on each payment made to investors. Payment is not guaranteed or insured and investors may lose some or all of the principal invested if the Issuer cannot make its payments.

Comments

What do you project the cannibalization rate from your location #1, to location #2 will be, given the close proximity? Is the reason opening location #2 capacity constraints at location #1? If so, at what rate are you turning down customers at locati ...

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